On the surface, it would appear as though Ikea has mastered the economics of design by bringing design to the masses. But their massive success lies solely in their ability to make cheap crap look amazing. Is the economic function of design just to distort or fabricate value in something that has no value otherwise? Can design actually be used to trick us into losing money? The Ikea effect has certainly proven the answer to be definitively yes.Consider this. The ubiquitous Klippan Sofa from Ikea sells for $500. Design Within Reach sells the Bottoni Sofa for about $2,500. The Bottoni fabric alone, nevermind the durability of the frame, will outlast the Klippan 8 times over and the Bottoni comes with extraordinary customer service, a range of fabric choices, greater attention to ergonomics, and a higher degree of environmental accountability. Compared to Ikea, all of that's not saying much, but still, that $2,500 sofa is starting to look like a steal.
There are a multitude of things in the marketplace that fall victim to the Ikea effect. Michael Graves and Philipe Stark at Target, Martha Stewart at K-Mart, every HGTV makeover show, the list goes on. The most fundamental principal of economics is that everyone benefits from a transaction. The loophole that is created by the Ikea effect results, in the end, with only the likes of Ikea benefiting by using design to generate the illusion of value.
One thing I will say in favor of the Ikea effect, it certainly illustrates the massive power design can have in transforming the most basic of economic principles.
